Suppose a 65-year-old person wants to purchase an annuity froman insurance company that would pay $21,600 per year until the endof that person’s life. The insurance company expects this person tolive for 15 more years and would be willing to pay 8 percent on theannuity. How much should the insurance company ask this person topay for the annuity?
| | $175,131.62 |
| | $188,964.27 |
| | $154,356.29 |
| | $184,884.74 |
